The Employment Contract between Ethics and Economics

Abstract: This thesis investigates what work ought to be like. The answer it presents consists of an outline of a liberaltheory of justice in the employment contract based on theory developed in the area of political philosophy. Thethesis also examines issues of efficiency—How should measures to improve working conditions be evaluated?—and the ethical implications of the economic theory of employment contracts and the neoclassical theory of themarket.Paper I: A theoretical framework is introduced for the evaluation of workplace inspections with respect totheir effects on working conditions. The choice of a concept of efficiency is discussed, and its relation to criteriafor a good working environment is clarified. It is concluded that in order to obtain reliable information onthe effects of different inspection methods, it is necessary to perform controlled comparative studies in whichdifferent methods are used on different workplaces.Paper II: This article outlines the structure of a Rawlsian theory of justice in the employment relationship.The theory answers three questions about justice and the workplace. What is the relationship between socialjustice and justice at work? How should we conceive of the problem of justice within the economic sphere?And, what is justice in the workplace? Reasons for a specific construction of a local original position are givenand arguments are presented in support of a principle of local justice in the form of a choice egalitarian localdifference principle.Paper III: The political philosophy of John Rawls is applied to the moral dilemma of whistleblowing, andit is shown that that the requirement of loyalty, in the sense that is needed to create this dilemma, is inconsistentwith that theory. In a discussion and rejection of Richard De George’s criteria on permissible whistleblowing,it is pointed out that the mere rejection of loyalty will not lead to an extreme position; harms can still be takeninto account.Paper IV: The case is made that if contemporary economics of the employment contract is correct, thenin order to explain the existence of employment contracts, we must make the assumption that the contractingparties are attempting to deal with decisiontheoreticignorance. It follows that the course of action that theemployer chooses to take when acting from authority cannot be justified by consent, since the informednesscriterion of consent cannot be satisfied under ignorance. It is then suggested that in order to achieve justificationof acts of authority, there must be in place a real possibility to contest employers’ decisions.Paper V: According to Ronald Dworkin’s theory of equality of resources, mimicking the ideal market fromequal starting points is fair. According to Dworkin, the ideal market should be understood as described in GérardDebreu’s influential work, which implies that we should conceive of trade as taking place under certainty. Thereare no choices under risk in such a market. Therefore, there is no such thing as option luck in the ideal market.Consequently, when mimicking this market, we cannot hold people responsible for option luck. Mimicking thismarket also implies that we ought to set up a social safety net, since rational individuals with perfect foresightwould see to it that they always have sufficient resources at each point in life. Furthermore, the idea of insuranceis incompatible with the ideal market.